CN’s FIRST-QUARTER NET INCOME BENEFITS FROM CHARGE

CNÆS FIRST-QUARTER NET INCOME BENEFITS FROM CHARGE    Canadian National Railway Co., boosted by an after-tax accounting benefit, reported first quarter net income of C$252 million ($174.2 million), up 9.6 percent.
   Excluding the $48-million cumulative after-tax benefit resulting from a change in accounting for removal costs of certain track structure assets, and CN's net income dipped 11 percent to C$204 million ($141.0 million).
   Operating income fell 8 percent to C$374 million ($258.5 million), as revenues slipped 1 percent to C$1.50 billion ($1.03 billion). Expenses rose 2 percent to C$1.12 billion ($775.7 million), as CN's operating ratio rose to 75.0 percent from 73.1 percent.
   E. Hunter Harrison, CN's president and chief executive officer, said the company held its own against 'major challenges,' including harsh weather, which caused congestion and additional operating expenses; higher fuel costs; and 'continued weakness in bulk commodities traffic, largely because of reduced Canadian grain volumes,' he said.
   Grain and fertilizers revenue fell 13 percent to C$234 million ($161.8 million), but was offset by a 13-percent jump in intermodal revenues, to C$265 million ($183.2 million).
   CN sectors also showing revenue increases were petroleum and chemicals, up 6 percent to C$290 million ($200.5 million), and metals and minerals up 3 percent to C$126 million ($87.1 million).
   Automotive revenue slipped 5 percent to C$143 million ($98.9 million), coal was down 4 percent to C$74 million ($51.2 million), and forest products declined 2 percent to C$317 million ($219.1 million).
   Harrison said the company remains cautious about 2003 prospects. 'Economic growth has slowed in the last six months, largely reflecting hesitant consumer spending in the United States. This situation could persist in the near term,' he said.
   CN, based in Montreal, operates a North American railroad spanning Canada and through middle America to the Gulf of Mexico.